ENCAVIS AG: Q1/2023 Results Slightly above Prior-Year Period

Source: www.gulfoilandgas.com 5/15/2023, Location: Europe

The MDAX-listed wind and solar park operator Encavis AG slightly increases sales and earnings in the first quarter of 2023. The increase in production volume of the wind and solar parks newly acquired last year and connected to the grid in 2022, the first-time full consolidation of the now 80% stake in Stern Energy S.p.A., and the planned additional remuneration from the solar parks under the Dutch feed-in tariff scheme SDE+ more than compensate for the marginally lower electricity prices than in the previous year and the meteorologically-induced decline in production from the existing portfolio.

The Management Board confirms the guidance for the full year 2023 published in March 2023 as well as the accelerated growth strategy until 2027.

The results in detail: The Group increased renewable electricity production by approximately 6% to 753 gigawatt hours (GWh) in the first three months of fiscal 2023, compared to 710 (GWh) in the first quarter of 2022.

Revenue after deduction of the electricity price caps increased by around 9% to 98.8 million euros (previous year: 90.4 million euros). 55.4 million euros (previous year: 51.7 million euros), or 56%, of this growth is attributable to the solar park portfolio and 31.3 million euros (previous year: 35.0 million euros), or 31%, to the Group's wind farm portfolio. The main increase in revenue in the segment PV Services of around 7.1 million euros to around 8.2 million euros was generated by Stern Energy, which was fully consolidated for the first time. In contrast, the decline in revenue of around 11% in the wind farm portfolio is based on the slightly lower electricity prices compared to the previous year and the meteorologically poorer wind conditions in the first three months of 2023 compared to the same period of the previous year. The Asset Management segment increased its revenue by around 9% to 4.1 million euros in Q1/2023 (previous year: 3.7 million euros).

At 64.3 million euros, operating earnings before interest, taxes, depreciation and amortization (operating EBITDA) in the first three months of fiscal 2023 were on par with the previous year (64.4 million euros). The operating EBITDA margin was 65% (previous year: 71%). The increase in revenue did not lead to an increase in operating EBITDA to the same extent, as Stern Energy's technical business had a below-average margin in the first quarter. Here, sales were recognised at-cost, i.e. without margin. This will be corrected in the coming quarter. Once the correction has been made, the margin of the service business will be again at the level of the guidance.

At 35.3 million euros, the result from operating activities (operating EBIT) is slightly higher than the 34.8 million euros of the prior-year quarter and results in an operating EBIT margin of around 36% (previous year: 38%).

Overall, Encavis achieved consolidated operating earnings after taxes of 16.6 million euros (previous year: 14.2 million euros), mainly based on an improved interest result of the projects. This results in slightly improved operating earnings per share (EPS) of 0.09 euros for the first quarter of 2023 (compared with 0.08 euros in the first quarter of 2022).

Cash flow from operating activities after three months amounted to 51.8 million euros (previous year: 64.7 million euros). The decrease is attributable to a special effect in the first quarter of 2022. At that time, the compensation payments to be made under the financial PPAs had been generated but not yet paid out. In the first quarter of 2023, such high compensation payments will no longer be incurred in this amount as a result of the slight decline in electricity prices.

"Despite less favorable weather conditions and slightly lower electricity prices, we are looking at a successful first quarter of 2023. Our main growth driver is the capacity expansion of our wind and solar park portfolio as planned. Here, with the acquisition of the two Italian solar park projects in Montalto di Castro and Montefiascone (together 93 megawatts) and the successful issuance of the green bonded loan of 210 million euros in the first quarter of 2023, we have made two important steps towards achieving our goals for the current fiscal year," said Dr Christoph Husmann, Spokesman of the Management Board and CFO of Encavis AG, on the successful first quarter of 2023.

For the 2023 financial year, the Management Board expects a slight decline in revenue to a little more than EUR 460 million, or EUR 440 million after deduction of the electricity price caps (2022: EUR 487.3 million and EUR 462.5 million, respectively, after deduction of the electricity price caps). Operating EBITDA is expected to exceed EUR 310 million (2022: EUR 350.0 million). The Group expects an operating EBIT of more than EUR 185 million (2022: EUR 198.3 million). For the operating cash flow, the Group expects a value of more than EUR 280 million (2022: EUR 327.2 million). Operating earnings per share (EPS) are expected to be more than EUR 0.60, slightly exceeding the previous year's figure (2022: EUR 0.60). Overall, the Group thus remains fully on its chosen growth path.

This year's Annual General Shareholders Meeting (AGM) of the Company will be held on June 1, 2023 at the Hamburg Chamber of Crafts, for the first time again in physical form.


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